Social Enterprise

What brands need to know about social media "buy now" buttons

More and more social media platforms are adding "buy now" buttons, bringing commerce right to social pages. Here's what brands should keep in mind before adding a button.

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Image: James Martin/CNET

Buying a new pair of sunglasses or cell phone charger could be as easy as liking a friend's Facebook status — and essentially located in the same place.

Since the summer, platforms like Twitter and Facebook have announced plans for buttons to bring commerce right onto their platforms.

In December, Old Navy tested out Twitter's "buy now" button with an offer for limited-edition blankets. The month before, AMC used the button to offer $30 gift cards to its theaters.

Also in December, Facebook announced several other buttons geared toward transactions, including a "sell something button."

There could be a few reasons why platforms would be interested in bringing commerce their sites.

Betsy Sigman, distinguished teaching professor at Georgetown University's McDonough School of Business, said this is a natural move, tracing the growth of things like online commerce and mobile commerce.

"People want to be on their phones all the time and one of the ways they're always on their phone is social media," she said.

Hootsuite CEO Ryan Holmes said this could be a big-picture play.

"The credit card industry is ripe for disruption, and given the $40-50 billion a year they make off interchange rates, there is potentially an enormous payout for social media companies moving in this direction," he said.

If Facebook and Twitter could cut down interchange fees (the money merchants pay to run credit card transactions), it could save merchants money.

"And it already has the network in place," he said. "There are nearly 200 million monthly active Facebook users in the U.S. alone, versus 79 million MasterCard credit card holders in the US."

The introduction of social commerce buttons could also alleviate a few other pain points for business, and perhaps more immediately.

For one, putting a prompt to buy something right on a post simplifies the number of steps customers have to take to complete a transaction, and fewer steps means fewer chances for them to change their minds.

So many things can go wrong between the time a potential customer decides to make a purchase, and actually hits "confirm."

"From a standpoint of an ad placed on a site like Facebook or Twitter that then requires someone to click off of that site and go into a retailer's commerce site in order to complete the transaction, everyone of those steps in an opportunity for drop off," Gartner analyst Jennifer Polk said.

Broken links, incorrect links, slow loading times, and plenty of other factors can lead to abandoned transactions.

"Feedback on the efficacy of advertising campaigns will be instantaneous, and to adapt campaigns will have to become live rather than static, constantly altering and self-editing to a user's actions and data," Holmes said.

These buy buttons could also be a boon for small and medium businesses who may not have the analytical or digital marketing capabilities to reconstruct and analyze that value chain, Polk said.

When a customer falls out of the purchase funnel, it's not always easy to determine not only why, but at what point.

"It's almost like CSI or NCIS, one of these crime solving situations, to try and whittle down all of the possibilities and figure out what might actually be impacting conversion," Polk said.

It could take a whole team made from analysts, digital marketers, media buyers and others to constantly be dealing with that data in order to glean some insight into what's going wrong, and then adjusting strategy. It's not a one-person job, and many SMBs just don't have the resources.

Again, if less goes wrong, there's less to figure out.

And one of the most important potential results for businesses might be the ability to outright identify social's impact on conversions.

"The data will be indisputable if they can see exactly how many consumers are buying directly from social. We already know the influence social media campaigns have on sales from a variety of data sources, but those number proof-points will be loose compared to those gathered from buy-button feedback," Holmes said.

Tweaking social strategy

"Social media will replace other, more traditional forms of advertising to become one of the most highly prioritized," Holmes said.

How a brand redefines its social strategy to make the most out of a buy button starts with looking at what its strategy supports, be it engagement, customer service, or organic media versus paid. Businesses will have to make sure their strategy supports revenue, customer attention, and customer acquisition, Polk said.

Also before launching into a buy button, business have to make sure they've got a sizeable audience out there of potential customers.

"Audience growth would be the next step before you launch into a buy now button, you may want to invest in advertising on Facebook to help grow your fans," Polk said. That could mean businesses making sure they're point people toward their social platforms, and that there's compelling content there that will make people want to connect with the brand.

Other pieces of this puzzle include making sure there are ways of sharing content from product pages back to the social site, and making sure that not only do customers know a brand has a social platform, but that there's incentive to go there, like deals, giveaways, offers or the like.

"Even if you have a million fans, not all million of them are going to buy from you on Facebook. It's going to be some small percentage, at least to start with, so you definitely want to make sure you have a critical mass," Polk said.

This is also where targeting comes into play in an important way — it's not about getting everyone to a business's page, it's about getting the right people there, the ones who fit the target customer profile and are likely to make a purchase.

Obstacles

Even as brands add these buttons to their pages, they may have some work to do building trust with potential consumers.

"All it takes is people willing to put their credit card information down somewhere," Sigman said, "There's going to be a larger percentage that's willing to do that as long as they trust the brand, trust the company, trust the social media."

When security breaches make the news every few months, and consumers receive fraud notices attached to a new debit card before money ever leaves their accounts, Polk said "consumers almost seem to be growing immune to it."

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About

Erin Carson is a Staff Reporter for CNET and a former Multimedia Editor for TechRepublic.

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